manusath-derana

Perceived Economic Opportunity PEO: Third Quarter 2018

January, 17, 2019

This brief report of the Perceived Economic Opportunity (PEO) presents the analysis of a random survey carried out using a random sample of 400 men and women covering all districts in Sri Lanka on their expectations of economic prospects in the ensuing twelve months.

 

STATUS OF JOB PROSPECTS OR BUSINESS PERFORMANCE

 

Analysis of the perceived economic opportunities in the months of July, August and September 2018 indicate that the expectations in terms of job prospects of people or developing the status of their business in the ensuing 12 months has increased compared to the second quarter of year 2018.

 

The same expectation increased in the month of July 2018 and showed a gradual decrease in the months of August and September. However, average of the three months showed an increased compared to the second quarter 2018.

 

In June, the inflation in the country stood at 2.5 percent and increased to 3.4 percent in the month of July. However, the inflation declined to 2.5 percent in the month of August but showed a noticeable decline in the month of September 2018 to 0.9 percent. The decline in food prices has made a significant contribution to the decline of inflation in September.

 

The deficit in the trade account expanded at a modest pace in September 2018 in comparison to September 2017 as import expenditure grew more than export earnings.  On a cumulative basis, the trade deficit remained widened during the first nine months of 2018.

 

The balance of payment was pressurized due to the outflow of foreign investments of the government securities despite the increase of earnings from the tourism industry.

 

The rupee depreciated by 9.7 percent against the US dollar during the month of September 2018.

 

Overall, the foreign sector in the country has been under pressure by September 2018. The widen of trade deficit, strengthen of the American Dollar and outflow of short-term investments affected the balance of the payment of the country.  Even though the export earnings increased over billion-dollar mark for the fourth consecutive month, the imports grew more rapidly than that.

 

 

The below graph shows the change of expectations in terms of job prospects of people, or development of the status of their business, in the ensuing 12 months in the third quarter compared with the second quarter.

 

Refer the graph 01 below;

 

 

ABILITY TO SAVE

 

According to the analysis in the months of July, August and September 2018, the expectation among the people to save a little more from their personal earnings in the ensuing 12 months has increased compared to the second quarter of year 2018.  Please Refer the Graph 02;

 

 

It shows that the expectation has increased noticeably in the month of July and decreased gradually.

 

EXPECTATION FOR REDUCTION OF CORRUPTION

 

The expectation for reduction of corruption in the country showed a significant positive trend in the first quarter 2018. However, the same expectation declined in the Second quarter of 2018 (April, May, June). But the same expectation increased in the month of July 2018 and has gradually decreased.

 

It is noted that the expectation showed a positive trend in the third quarter compared to the second quarter 2018.

 

Please Refer the Graph 03;

 

PEO; Perceived Economic Opportunity is developed and surveyed by the Foundation for Economic Freedom in Sri Lanka. PepperCube Consultants carry out field research covering the entire country.

 

The Perceived Economic Opportunity was developed and is measured by the Foundation for Economic Freedom in Sri Lanka (FEF) in partnership with Friedrich Naumann Stiftung Fur Die Freiheit.